January 2019

Happy New Year – the party has just begun!

The Dow Jones Index wiped of the gains of 2018. It was back at the index levels of 21,812 on Christmas eve. After it peaked to 26,828 on 3rd October 2018, analysts and investors believed that the party had just begun. They were sadly mistaken at least for now!

Let’s look at events that contributedinto spooking the markets in 2018. Events such as these do impact investor sentiments but make no mistake, events like these also provide an opportunity to make money. The last fire sale that happened in the US was in 2008 –The subprime crisis.

Trumped Up economics stumped markets.

So much so for free market economics, but Trump did his own gig in the white house. Starting with the US imposing import tariffs of $ 250 billion on Chinese products and
China retaliated in its own way. Trump scuttled the proposed $ 117 billon merge of Qualcomm with Broadcom, a chipmaker with deep ties to South East Asia. This would have been the biggest tech merger of 2018 which was stumped by Trump.

Exits by CEOs

Start with the big one! Carlos Ghosn the flamboyant CEO of Renault Nissan gets arrested for misappropriation in Japan. Then came the firing of John Flannery
from General Electric and John Cryan from Deutsche Bank. Fire and Fury at the same time drove the markets into a tizzy.Prominent CEOs stepped down after creating deep value strategies for their companies – Indra Nooyi at PepsiCo, Vittorio Calao from Vodafone and Paul Polman at Unilever.

Trump gets really angry!

If Trumped Up economics was just not enough, Trump now trained his bazooka on his team first starting with Rex Tillerson as Secretary of State. Next it was Jeff Sessions as
Attorney General to take the heat. Both were accused of undermining Trump’s political strategy and stepped down from their respective positions. Jim Mattis, Secretary of Defense put in his papers differing with Trump’s foreign policy of withdrawing US troops from Syria and Afghanistan.His resignation jolted the US Administration.

Startups make the worst possible mistakes.

What started off as a focused marketing campaign turned out to be Facebook’s biggest blunder. Its links with Cambridge Analytica that obtained private information of 87 million FB users illegally, wiped out $ 119 billion in market cap. Elon Musk was in the news for all the wrong stuff. After delivering disruptive technology in the automobile sector, he was ejected as Chairman of Telsa as the regulator scorned at his idea of taking the company private.

You can’t put these companies down. Facebook, Apple, Amazon, Netflix, Google are trading at an average of 59% below its 2018 peak.They are giving a message.
BUY. BUY. BUY.Give Phundo a call and we will tell you how. SELECT INVEST RELAX the Phundoway. Happy Investing!!

Disclaimer: Mutual funds are subject to market risks. Please read the offer document before you start investing.


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